FTSE 100, DAX and Dow slump amid risk-off move

FTSE 100, DAX and Dow are on the slide once more, with risk-off sentiment driving a move out of stocks.

FTSE 100 turning lower after recent retracement

The FTSE 100 has finally turned lower again, following a 50% retracement over the first half of the week. The decline seen overnight sees a return to the risk-off sentiment in play in the early hours of Monday morning.

We are likely to see further weakness from here, with a break below 7390 key in furthering the narrative that this index is heading back towards the ascending trendline that underpins a long-term symmetrical triangle. This bearish outlook holds unless we break through the 7516 level to bring about a double bottom formation.

DAX heads back towards Tuesday lows

The DAX has similarly been on the slide overnight, with the index slumping back towards Tuesdays low of 13,164. This looks like the beginning of another leg lower, with the index expected to decline back towards the 76.4% Fibonacci retracement level.

Nevertheless, even if we do see that break it is worthwhile noting that we remain within a wider uptrend that could kick in once again depending on how the coronavirus continues to drive risk sentiment. Thus, a wider bearish picture would only come into play with a break below 12,947.

Dow Jones heads lower after recent gains

A similar story for the Dow Jones, with recent gains being eroded by sharp losses overnight. Interestingly, the 28,448 low comes around the 76.4% support level, pointing towards a crucial area of support down below.

Should that support zone break we would need to see 28,122 broken to signal a wider bearish continuation signal coming into play. To the upside, a failure to break below this prior support - followed by a rise through the recent peak of 28,938 - would bring a more bullish outlook.


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